March 12, 2007

Unions, Corporations and Taxes

I disagree with the Right that unions are their enemy,since unions help the keep workers on the job with the up to datetechnological education, and since the unions negotiate for wagesand benefits, the worker not only approaches his work as aprofessional, since he or she will be making a living wage, butoverall, adds to the middle class, which benefits the corporations. If the corporate philosophy of lowering wages and benefits were not to meet resistance from the unions, the middle class would shrink and the consumer base weaken. To the extent that unions have been excluded from today's economy, that has already happened.

I disagree with the Left that corporations are their enemy.Corporations create good jobs. And so do small and mediumsized businesses. They all have to make a profit, and the popularidea that a corporation could make too high a profit, as in therecent petrol conglomeration's windfall profits, is ludicrous, esp.since their profit history shows cyclical high's and low's.Our economy would benefit by teamwork between workers andbusiness. We need to grow the unions and lower taxes.

Federal taxes should be lowered to generate higher revenuesand more jobs.

Quoting from Kudlow's Blog (in black fonts) From today's Wall Street Journal***:"...The benefits of low taxes are on full display in Iceland, which provides an almost perfect demonstration of the Laffer Curve. From 1991 to 2001, as the corporate-tax rate fell gradually to 18% from 45%, tax revenues tripled to 9.1 billion kronas ($134 million in today's exchange rate) from just above 3 billion kronas. Revenues have more than tripled again since 2001 to an estimated 33 billion kronas last year. Personal income-tax rates were cut gradually as well, to a flat rate of 22.75% this year from 33% in 1995. Meanwhile, the economy has averaged annual growth of about 4% over the past decade...."

To top it off, Iceland's government is now considering a reductionof its corporate-tax rate to ten percent. That would beat Ireland'slow corporate tax rate by over 2 percent.

Meanwhile, the prevailing 35 percent corporate tax rate herein the U.S. continues to take monster bites from all U.S. businesses.

As I've written before:

"Corporate profits are a vital form of capital and capital is the key ingredient in capitalism. If the latter is to work and expand prosperity, then the former must be saved. In fact, corporate profits shouldn’t be taxed at all...Profits are the seed corn of economic growth. Eliminating the tax burden on profits will reap a record harvest of jobs and prosperity."

*** "Iceland's 300,000 citizens have become some of the world'swealthiest people by opening up their economy and cutting taxes,and now they're contemplating another dose of the same economictonic."

"The government convened a special task force in 2005 to look intoways of transforming Iceland into a financial hub. Headed by SigurdurEinarsson, ..."(THE FULL WSJ.com ARTICLE IS ONLY AVAILABLE TO SUBSCRIBERS)